Stock performance comparison

[seanbaby]

Folks,
What is the best way to compare 2 stocks, that takes into account the dividends and capital gains as well. If you just look at the stock performance over time, its not very accurate since one may be yielding dividends while the other may be not. Thank you.

[Triple digit golfer]

Look at total return, not a price chart.

[iudiehard1]

https://www.portfoliovisualizer.com/

[alex_686]

Look at total return, not a price chart.

Then adjust for risk.

[alex_686]

https://www.portfoliovisualizer.com/

And be careful with this. Highly subjective. If I can pick the time period I can probably game the system to get the stock of my choice to win.

Why are you trying to figure this out? I have done this stuff professionally. There are so many deceptive questions.

[arcticpineapplecorp.]

Folks,
What is the best way to compare 2 stocks, that takes into account the dividends and capital gains as well. If you just look at the stock performance over time, its not very accurate since one may be yielding dividends while the other may be not. Thank you.

i can't think of stocks paying capital gains unless it goes private and shareholders are bought out (think Twitter). Otherwise you generate the cap gains when you sell the stock you own for more than you paid originally.

The dividends on stocks will fluctuate. Go look at at what GE is paying in dividends (https://www.nasdaq.com/market-activity/ ... nd-history) they paid $0.57/share in dividends back in 1996-1997 and paid $0.01/share in dividends in 2021 (now pay $0.08/share).

they can also go in the other direction too of course.

so it's hard to tell what will happen based on dividends.

It's also hard to compare 2 stocks for many other reasons. For one, what will Amazon's stock do next? Will it go up or down? Will it be more like 2020-2021 or more like 2022? You simply can not know this in advance.

past performance is no guarantee of future results. It's not just a saying, it's a reality. Just because some company did well in the past doesn't mean it will in the future and just because some company did poorly in the past doesn't mean it will in the future. You have no crystal ball so you can not know which of the two companies will do better than the other (since you're comparing). You're guessing. Everybody's guessing.

They may think they know or act like they know or have some fancy metrics (or usual metrics like P/E, PEG ratio, 200 day moving average, blah blah), but think about the following:

If it was so easy to know which stock was going to be (not was) the best going forward, why would anyone own more than one stock? There can only be one best stock right (it's of course possible there can be two stocks that are the best but not likely when you get down to three or more decimal points). There will be lots of worst stocks too (all the ones that go to $0). And all the stocks in between.

If it was easy to pick the best stock, then why are there thousands of them to choose from?

because nobody knows.

do yourself a favor and give up the ghost of trying to pick stocks if that's why your asking for a stock screener (in essence). There are lots of stock screeners out there. None of them are predictive of anything. If you do well, it is more likely due to luck than skill. Don't make the mistake of confusing outcome with strategy.

One last thought so as to not take my word for this. If you think it should be easy to find/compare stocks to get the best/better one to invest in, then why can't most million dollar money managers do this with any success over the long term (as well as short term). The SPIVA reports show us the difficulty even most money managers have trying to beat a low cost index fund (like the S&P index). See for yourself:

https://www.spglobal.com/spdji/en/resea ... hts/spiva/
https://www.spglobal.com/spdji/en/spiva ... /spiva-us/

and here's George Sisti's take on it also using Morningstar data:



sourc: https://oncoursefp.com//images/Vectors% ... 0final.pdf

[seanbaby]

https://www.portfoliovisualizer.com/

And be careful with this. Highly subjective. If I can pick the time period I can probably game the system to get the stock of my choice to win.

Why are you trying to figure this out? I have done this stuff professionally. There are so many deceptive questions.

Thank you for the response - I'm just trying to figure out how to evaluate the performance of 2 stocks/ETFs/MFs over a period of time because, just looking at the price is not enough. I didn't realize that the total return (like someone mentioned in this post) takes into account any dividends as well. In simple words, if 2 stocks A and B went from $40 to $50 in 5 years, its not necessarily that both performed the same, because one maybe handing out dividends. I'm just trying to educate myself.

[arcticpineapplecorp.]

https://www.portfoliovisualizer.com/

And be careful with this. Highly subjective. If I can pick the time period I can probably game the system to get the stock of my choice to win.

Why are you trying to figure this out? I have done this stuff professionally. There are so many deceptive questions.

Thank you for the response - I'm just trying to figure out how to evaluate the performance of 2 stocks/ETFs/MFs over a period of time because, just looking at the price is not enough. I didn't realize that the total return (like someone mentioned in this post) takes into account any dividends as well. In simple words, if 2 stocks A and B went from $40 to $50 in 5 years, its not necessarily that both performed the same, because one maybe handing out dividends. I'm just trying to educate myself.

yes, but again:
1. some companies may pay dividends and outperform their competitors
2. some compaies may pay dividends and not outperform their competitors
3. some companies may not pay dividends and out outperformm their competitors
4. some companies may not pay dividends and not outperform their competitors

and even if you look at total return (meaning including dividends) it is backward looking only, not forward looking.

since you're also considering mutual funds, you will also have to consider capital gains (which was in your original questions) unless you pick a low turnover index fund (like total market stock index fund) because cap gains on active mutual funds are a tax drag on returns (a forced tax if you will) that could be because the fund manager chose to sell stocks after a runup or because customers forced redemptions (all sold at once) and the fund manager had to sell, thereby creating cap gains, whether s/he wanted to or not.

have you just simply considered investing in a much more simple/less costly way, often recommended here, like:
The Three Fund Portfolio

the beautiful thing about owning the market (via total market index funds) is you don't have to do all this work you're trying to do (comparing funds, researching what was hot, etc., into perpetuity). When you own the market you are guaranteed to get the return of the market. If you are trying to beat the market, you are guaranteed nothing.

[seanbaby]

https://www.portfoliovisualizer.com/

And be careful with this. Highly subjective. If I can pick the time period I can probably game the system to get the stock of my choice to win.

Why are you trying to figure this out? I have done this stuff professionally. There are so many deceptive questions.

Thank you for the response - I'm just trying to figure out how to evaluate the performance of 2 stocks/ETFs/MFs over a period of time because, just looking at the price is not enough. I didn't realize that the total return (like someone mentioned in this post) takes into account any dividends as well. In simple words, if 2 stocks A and B went from $40 to $50 in 5 years, its not necessarily that both performed the same, because one maybe handing out dividends. I'm just trying to educate myself.

yes, but again:
1. some companies may pay dividends and outperform their competitors
2. some compaies may pay dividends and not outperform their competitors
3. some companies may not pay dividends and out outperformm their competitors
4. some companies may not pay dividends and not outperform their competitors

and even if you look at total return (meaning including dividends) it is backward looking only, not forward looking.

since you're also considering mutual funds, you will also have to consider capital gains (which was in your original questions) unless you pick a low turnover index fund (like total market stock index fund) because cap gains on active mutual funds are a tax drag on returns (a forced tax if you will) that could be because the fund manager chose to sell stocks after a runup or because customers forced redemptions (all sold at once) and the fund manager had to sell, thereby creating cap gains, whether s/he wanted to or not.

have you just simply considered investing in a much more simple/less costly way, often recommended here, like:
The Three Fund Portfolio

the beautiful thing about owning the market (via total market index funds) is you don't have to do all this work you're trying to do (comparing funds, researching what was hot, etc., into perpetuity). When you own the market you are guaranteed to get the return of the market. If you are trying to beat the market, you are guaranteed nothing.

Thank you for that. Yes, the goal is to move to a 3 or 4 fund portfolio over the next 1-2 years; but I have lot of baggage from last few years that I need to somehow slowly transition (sell). I'm new to the boglehead community and amazed at the wealth of knowledge this forum participants have and are willing to share without judging. I'm pissed i haven't stumbled upon this few years ago. I'm approx 15 years to retirement - hopefully not too late to the game. [edit]Created bogleheads account about 4 years ago, but didn't participate/care much about the finances. Only in the last year or so, i've been educating myself.